Rising demand in e-grocery; Familykart.com experiences rapid growth

With the growth of online retail in India, e-tailing of Grocery & FMCG products has also risen. Familykart.com, a Delhi based online grocery retailer has experienced rapid growth and claims to add 30000 unique visitors every month. Familykart offers daily essentials such as cereals, rice, flour, lentils, etc. as well as household utilities and beverages.

According to Vaibhav Goel, CEO, familykart.com “Familykart was conceived with one simple objective in mind: to offer busy people a true alternative to going to the market/ kirana stores every week. We have built this business to address the needs of busy people in the 21st century, without compromising on the dedication to customer care and service that people expected in the past” .

Familykart was founded in December 2011 by Vaibhav Goel who manages strategic relationships, product and expansion plans for Familykart.com.

“We started off with the vision to build a company around FMCG. But instead of just advertising or marketing, we wanted to focus at closing-the-transaction level. 95 per cent sales happen through traditional retail outlets so there is an opportunity of providing the customer an option of home delivery and huge variety. Any average consumer doesn’t really enjoy spending 3-4 hours every fortnight buying groceries and that’s whereFamilykart.com comes in,” says Goel.

However, there are challenges that need to be conquered. “Margins in grocery are less but we have added household utilities and stationery to compensate for that- a strategy which has worked well for us. Maintaining a high number of SKU’s is a challenge”, added Goel.

The company currently has over 12 categories and plans to add niche categories over the coming months. “There are more products coming up. We are planning to add Over the Counter medicines as a product category. In order to tap potential consumers over mobile, we will integrate mobile apps which will allow people to order groceries even while travelling,” added Goel.

Speaking on the revenue model of Familykart, Vaibhav Goel said, “We are an online store for monthly grocery and not a one-off need. So, we expect an average order size of Rs 1500- Rs 1800. Currently average size is Rs 1200 which will go up as we add more SKU’s. We currently don’t charge for home delivery and the minimum order size is Rs 1000 (we sometimes lower this for specific promotions). With margins in the range of 15-18% in grocery and 20-25% on household utilities, we believe that we need to stick to our fundamentals such as minimum order limit to stay profitable or even survive. We are again consciously staying away from perishables, fresh items and dairy products”.

Familykart is also looking to raise funds as they are in talks with few Angel investors as well as VC’s (Venture Capitalist). “We are currently focusing on the Delhi NCR market and our projected revenue for 2012-13 is around INR 40 million. We will stick to Delhi NCR for next 1-2 years and then add Chennai and Pune. We are planning to operate in the four major metros of India over the next 5 years”, said Goel.